Module 1 Topic 1 ENG

MODULE 1 : EXPORT READINESS

TOPIC 1 - UNDERSTANDING THE PROCESS OF
“MIND RESETTING” FROM DOMESTIC TO
INTERNATIONAL MARKETS

MODULE 1 : EXPORT READINESS

TOPIC 1 - UNDERSTANDING THE PROCESS OF
“MIND RESETTING” FROM DOMESTIC TO
INTERNATIONAL MARKETS

SECTION 1 : Different taste and preferences
SECTION 2 : Legal requirements

GUIDE TO
EXPORTING
SUCCESSFULLY

Learning Objectives

At the end of the topic, participants will be
able to:
1. make necessary preparations for

export market
2. rearrange firm’s resources to succeed

in export market

3. manage risks associated with export

market

GUIDE TO
EXPORTING
SUCCESSFULLY

SECTION 1 Different Taste and Preferences

Overview

Section 1 provides an overview of the differences of taste and preferences in the
export market. The tastes and preferences include taste profiling, packaging, colour
and ergonomics.

Trade Transaction

▪ Exports are goods/services manufactured or produced in
one country and sold to buyers in another country. In simple
terminology, export is a cross border transaction. Trade
transactions happen daily.

▪ Technology and electronic businesses bring firms’ products
closer to targeted consumers. The current export activities
enable the firms’ products available even in remote areas in
the world.

▪ Although the opportunity for exporting is widely open, the
exporter should consider the amount of thinking and strategy
needed to penetrate the export market. The exporter must
learn to reset their mind and prepare for the challenges in
the export market.

Failure Factors In Export Market -
Some Explanations

1. Failure to cope with changing technology

• Some firms invest heavily in labour-based
processes to capitalise on low labour costs.

• For the export market, automated production
methods are essential.

• This is because, technology changes and labour-
based processes could not provide the quality and
precision required in the finished products.

Technology vector created by jcomp - www.freepik.com

Failure Factors In Export Market -
Some Explanations (cont.)

2. Lack of specialisation
• Target market conditions were crucial determinants of

specialisations for firms serving primarily domestic markets
and becoming exporters later.
• Firms involved in the export market must be more
specialised in what products to export and focus on what is
needed to export the products. Identifying the right products
for exporting is important.
• Firms may have to create autonomous production for
exporting the products.

Ribbon icons created by Flat Icons - Flaticon

Failure Factors In Export Market -
Some Explanations (cont.)

3. Fail to establish buyer-consumer links
• Buyers and consumers of the firm’s products could

provide useful market information.
• The buyer-consumer relationships is instrumental in

inducing product quality improvements, or in simple
terms, consumer feedback.
• At an early stage prior to exporting, the links could
be established by “researching and studying” the
target consumers in export market.

Consumer icons created by ultimatearm - Flaticon

The Power of Tastes & Preferences In
Export Market

• In 2011, KFC introduced the Tom Yam flavoured fried chicken.
• Among the responses obtained from customers:

• “Slightly sourish with lime taste inside”
• “The chicken tasted like store-bought Tom Yam paste”
• “Tom Yam Crunch is too sour for me. I still prefer Hot &

Spicy.”
• KFC sales went down for almost a month.
• In the end, KFC retrieved the Tom Yam Crunch chicken and

reintroduced the Hot & Spicy chicken.

This scenario highlights the importance to study consumer tastes and
preferences when introducing a product in any market.

Chicken bucket vector created by catalyststuff - www.freepik.com

The Power of Tastes & Preferences In
Export Market (cont.)

Important to note, consumers abroad have their
own TASTE PROFILING.

Characteristics of Good Packaging Design

1. Simple and Clear
Product packaging should answer these TWO (2) straightforward questions:

Is the brand behind it
visible?
What is this product for?

Characteristics of Good Packaging Design
(cont.)

2. Ethical

• Outer illustration should match the content (e.g.,
a picture of a cookie drenched in chocolate
should match what the product looks like inside).

• Misleading information and disappointed
consumers may lead to poor sales performance
and bad brand image.

• In the export market, especially in developed
countries, ethics are vital.

Characteristics of Good Packaging Design
(cont.)

3. Originality

• Originality, character and memorability are important in making
sure that your product stands out from the rest (e.g., keropok
lekor from Terengganu is considered authentic)

• Associate and highlight the statement on the packaging such as
“ORIGINAL KEROPOK LEKOR TERENGGANU”.

• In the export market, this can be an important selling points.

Characteristics of Good Packaging Design
(cont.)

4. Practicality

• Practicality deals with the actual shape, size and
functionality of the product container, not just the label
or wrap.

• When Heinz turned the ketchup bottle upside down,
sales skyrocketed. A similar strategy can be used to
sell keropok lekor.

• In short, innovation in packaging is essential for the
export market

The Effect of Colour In Product Packaging

FACTS • Colour is an essential part of product packaging.
 Colour develops a consumer's perception of a product or
Generally, 85% of service according to the emotion they associate with the
consumers buy products colour.
 Colour creates positive feelings and helps consumers make
based on colour. decisions between product choices.
 Colour triggers thoughts, feelings, and emotions about your
In a study, BLUE generates product and directly impacts the purchasing decision.
more positive emotions than
RED in the Northeast Asia

(Ploom et al., 2019).

• For the export market, colour is closely related to culture.

The Effect of Colour In Product Packaging
(cont.)

Some examples:

Red, colour of Blue, trustworthy Pink, a symbol of Yellow, a symbol Green, health,
power
and cool fun, frilly and of confidence environment and

feminine wealth

Purple, a symbol Orange, fun and Gold, a symbol Black, traditional, Brown, comfort
of wealth and relaxation
of elegance and cool exciting or
relaxing
prestige

Ergonomic Packaging for Export Market

• Ergonomic packaging is designed to protect consumers from
potentially handling a product inefficiently or ineffectively.

• Three reasons for considering ergonomic packaging are as follows:
 ease of access to the product inside.
 the grip of the package.
 size and form for interaction.

• According to Lydekaityte and Tambo (2020) ergonomic packaging
serves two purposes:
 enhance the product’s functionality or experience to serve its
primary initial purpose more effectively
 improve consumers’ experiences through engagement and
entertainment in both the retail and the usage environment

SECTION 2 Legal Requirements

Overview

Section 2 provides an overview of the technical and legal requirements for certain export
markets. The exporter must consider and fulfil the requirements set by the target market.

Technical Specifications & Legal
Requirements: Why Are These Factors
Important in Export Market?

• The exporter must bear in mind that technical specifications of the products must meet
the local “legal” requirements.

• Product technical and legal requirement are enforced by the country’s law.
• The products may need to obtain some approval from certain institutions before entering

the market.
• For example, food and beverage products are subject to the Food and Drug Association

or a similar institution of the importing country.

Technical Specifications & Legal
Requirements: Why Are These Factors
Important in Export Market? (cont.)

EXAMPLE 1: A number of scientific associations, institutions and authorities have issued policy
recommendations that ultimately aim to reduce intake of sugars, with a special focus on recommendations
for children. These policy recommendations can be generally categorised in actions that i) tackle the
provision of information to the consumers, e.g. labelling of sugar content in foods, restrictions of marketing
practises for foods high in sugars content, or encouraging healthy behaviours, such as drinking water, ii)
making the healthy option available by improving the 'food environment', e.g. offering freely available water
and limiting the availability of foods and beverages high in sugars content in schools or public environments,
reformulating processed foods to reduce sugars content, and iii) implementing financial (dis)incentives, such
as taxes on products with high sugars content to dissuade consumers from purchasing or consuming them.

LESSON LEARNED: Be mindful of the quantity of sugar allowed when exporting products to
European countries.

Technical Specifications & Legal
Requirements: Why Are These Factors
Important in Export Market? (cont.)

EXAMPLE 2: All foods sold in Australia must meet Australia's food standards and must meet biosecurity
import conditions. Therefore, to help protect Australia’s unique environment from unwanted pests and
diseases, the Department of Agriculture, Water and the Environment regulates products imported into
Australia. The importation of some products is, by law, subject to certain biosecurity import conditions. Some
products are not permitted entry, while other products are only allowed into Australia subject to meeting
import conditions that mitigate the biosecurity risk. This may include a requirement for an import permit.

LESSON LEARNED: Australian legal requirements may require the exporter to pass laboratory test
for food products.

Technical Specifications & Legal
Requirements: Why Are These Factors
Important in Export Market? (cont.)

EXAMPLE 3: The Korean Food safety management system is based on the Special Act on Imported Food
Safety Control (Special Act), which aims at contributing to sound order in trade and to improving people’s
health by ensuring the safety of imported food, etc. promoting improvement in the quality thereof, and
providing proper information.
(source: www.mfds.go.kr).

LESSON LEARNED: Korean legal requirements are more complex.

Technical Specifications & Legal
Requirements: Why Are These Factors
Important in Export Market? (cont.)

EXAMPLE 4: Nineteen out of the 27 member state countries of the European Union have voted to either
partially or fully ban Genetically Modified Organisms (GMOs). This comes after the European Commission
called for each EU nation to vote if they wanted to opt out of growing GMO crops even if they were allowed to
do so within the boundaries of the EU.

LESSON LEARNED: Legal requirements are always updated. The exporters must be aware of these
changes, especially when it involves the target export market.

Technical Specifications & Legal
Requirements: Why Are These Factors
Important in Export Market? (cont.)

Industrial products must meet the environmental law specifications, such as less carbon
emission and energy efficient.

EXAMPLE 5: In June 2021, the EU adopted a European Climate Law, establishing the aim of reaching net
zero greenhouse gas emissions (GHG) in the EU by 2050. The law sets an intermediate target of reducing
GHG by at least 55% by 2030 compared to 1990 levels.

LESSON LEARNED: Legal requirements change according to the current needs of the country.

Something to
Ponder

We have many food and beverage products that have the potential to be exported, such
as kerepek (chips), keropok lekor, soy sauce, coconut nira, and various items. In
addition, many of our local fruits find it difficult to penetrate the developed country
markets. Why?

Conclusion

Exporters should:

1. reset their mind to better excel in the export market.
2. prepare products in line with consumer’s expectation in the target market.
3. do proper study of the product legal requirements before venturing into exporting.